HBO, Turner lift Time Warner Q1

Time Warner has reported a profitable Q1 boosted by higher advertising and subscription revenue at its Turner division and HBO network.

Revenue at Turner, which owns channels such as CNN and Cartoon Network, rose 4.5 per cent in the quarter. Advertising revenue grew 4 per cent, while subscription revenue rose 3 per cent. Revenue at HBO increased 4.4 per cent.

HBO’s standalone streaming service, HBO Now, was launched on Apple devices earlier this month, in time for the fifth season premiere of Game of Thrones, reaching millions of viewers who do not subscribe to pay-TV.

“The initial response (to HBO Now) has been very positive both in terms of subscribers and usage,” Chief Executive Jeff Bewkes c0mmented.

Time Warner said the Game of Thrones premiere was watched by a total of 18.1 million people in its first two weeks, over 1 million more than the viewership for the prior season’s first episode.

Turner and HBO together account for more than half of Time Warner’s total revenue.

Revenue in the company’s Warner Bros. Studio business rose 4.3 per cent, helped mainly by higher licensing revenue from subscription VoD sale of Friends and the box-office success of American Sniper.

The company’s net income, however, fell to $970 million in the quarter ended March 31st, from $1.29 billion a year earlier.

Net income was hurt due to an increase in marketing costs primarily related to the launch of HBO Now and higher spending on original programing.